Not many people know it, but Nevada used to be part of Mexico. It all started with the Spanish conquistadors. Exploring expeditions in the 16th, 17th and 18th Centuries allowed Spain to lay claim to a vast portion of North America, stretching from Florida to California, and from Tierra del Fuego at the southernmost point of South America to what is now the Canadian border. The Spanish called their vast empire in North America “New Spain.” It lasted for nearly three hundred years.

After the French revolution, Napoleon Bonaparte invaded Spain and made his brother, Jerome, king of that country. Jerome sold a large parcel of New Spain to Napoleon, who in turn sold it to the United States – the Louisiana Purchase.

With the overthrow of the Spanish monarchy by the French, the Spanish colonists in both North and South America grew restless. In Mexico, the colonists declared their independence and established the independent country of Mexico on September 16, 1810.

Like many newly-established countries, it took a while for Mexico to settle upon a form of government. The country was administered by the Generalissimo of the American Armies (1810-1811); the Supreme Governing Junta of America, also called the Supreme Junta of the Nation (1811-1813); a Generalissimo of the North American Armies in charge of the Executive (1813-1814); an Executive Power (1814); several Presidents (1814-1815); a non-functioning Executive Commission (1815-1817); a President of the Provisional Governing Junta (1821); a President of the Regency of the Empire (1821-1822); an Emperor (1822-1823); a President of the Constituent Congress (1823), by Presidents of the Supreme Executive Power (1823-1824); and from 1824, by Presidents of the Federal Republic of Mexico.

This turbulent era also saw a number of wars, which reduced the territory of Mexico by over one-third. In the north, the state of Tejas seceded in 1835, forming the Republic of Texas in 1836. Shortly after the Republic of Texas became one of the United States in 1845, another war broke out. This war (the “Mexican War” of 1846-1848) was a disaster for Mexico. The United States annexed all of the northern part of that country, which included the present-day states of California, Oregon, Nevada, Arizona, New Mexico, Utah, Idaho, Montana, and parts of Colorado, Wyoming, and Washington.

After the Mexican War, more troubles were in store for the Republic of Mexico. In an effort to end the economic stranglehold of the Catholic Church over the land and people, Mexico adopted a new constitution, and in 1857 the country broke down into civil war (la guerra de la Reforma, “the War of the Reform”). The combatants in the fighting were the Liberals and Conservatives. The Liberal faction was headed by Benito Juárez (Benito Pablo Juárez García), Mexico’s greatest statesman, whose capitol was at Vera Cruz. The United States gave its diplomatic recognition to this government. The Conservatives, with their capitol at Mexico City, had several leaders, the most prominent of which was General Félix Zuloaga (Félix María Zuloaga Trillo). By 1860, the Liberal party prevailed, and Benito Juárez took control of Mexico at the end of the year.

At the same time, the United States was sliding into a civil war of its own. Following the election of Abraham Lincoln in November of 1860, most of the southern states seceded and formed the Confederate States of America. When the Confederate troops of South Carolina bombarded and then forced the surrender of the US garrison at Fort Sumter in April of 1861, the War of the Rebellion began and raged until May, 1865 -- four long years.

In Mexico, the various factions that fought their civil war had borrowed large sums of money from foreign creditors. The fighting devastated Mexico’s economy, and the country had to suspend payments on its debts. Taking advantage of the relative weakness of the United States during the US Civil War, in December of 1861 the governments of France, Great Britain and Spain landed an allied military force at Vera Cruz to protect their interests in Mexico and to try to collect the debts owed to their citizens. Juárez negotiated with the allies and promised to resume payments, and the British and Spanish troops began to withdraw from Mexico in April, 1862.

The French, however, did not withdraw and instead sent reinforcements to their troops in Mexico. At the time France was ruled by Louis Napoleon, the nephew of Napoleon Bonaparte. Louis Napoleon was elected President of France, but after the election he proclaimed himself Napoleon III, Emperor of the French (the British referred to him as “the nephew of the uncle”).

While negotiations for the Mexican government to repay its debts were ongoing, the French commander, General Charles Ferdinand Latrille, comte (Count) de Lorencez, advanced on Mexico City from Vera Cruz, occupying the mountain passes which led down into the Valley of Mexico.

At this point it became clear that Napoleon III planned to turn Mexico into a colony. The French advance was along a route that had been used several times in the past to conquer Mexico, first by the conquistador Hernan Cortes and most recently by US General Winfield Scott during the Mexican War.

France declared war on Mexico, and called on those Mexicans who had fought on the side of the Conservative Party in the civil war to join them. Napoleon III planned to turn Mexico into an empire ruled by Archduke Ferdinand Maximilian Josef von Habsburg, the younger brother of the Emperor of Austria-Hungary.

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Euro continues to get butchered. Portugal to be downgraded a couple of notches - you mean it isn't junk yet? People dead in riots/fire in Greece. Yields spreading in Spain and Portugal. There is nothing to worry about though..... riiiight.

CV, still amazed by your call. Not that it reached there, I knew that it would get hit in May, but you nailed the day. It is impressive.

May 5 (Bloomberg) -- U.S. lenders face “tough” comparisons when they report second-quarter results because of weak revenue growth, according to banking analyst Meredith Whitney.

Banks benefited from write-ups tied to fixed income assets as consumer banking lagged, Whitney said today on Bloomberg Television. While Whitney doesn’t see “earnings power” at banks, she said she might be a buyer if prices were lower.

I will be back to discuss bonds IN DETAIL late in the afternoon. Suffice to say that we have entered a new regime in the last ten days or so.

Just watching for now and happy to be very very very long Treasuries. Anyone got input on what we are seeing? ADP? Weaker than expected? Or are we watching weakness in the Euro translate into forced carry unwind as we have all predicted?

@lb: Yeah, that makes me sad about Yankee Stadium. Don't get me wrong. I loathe the Yankees with all of my being but I really enjoyed the Stadium. There was a vibe and electricity in that place like no other, especially during Red Sox games and other big games. It always felt like an important "event" in there. Haven't been to the new place. I'm sure it's nice but I'll be the vibe ain't the same. Can't replicate a place like Yankee Stadium. Too many things happened there over the years. Too many memories for people to replicate at a replica.

@lefty: Never went to the old Comiskey Park but have been to Wrigley. Similar smells in there. Same with Fenway. Fenway just feels like "home" every time I go back. So many memories. Of course, they're never going to get rid of that place in my lifetime. The owners have dumped too much money into renovating and expanding it.

Wrigley's Field, Camden Yards, and RFK I guess where the Nats started playing- so I don't think that even counts-

LB- I remember when they were building the "new" Comiskey Park aka US Cellular Field- butted right up to old Comiskey Park- pretty wild seeing the two ball parks back to back so to speak- before they demolished the original

We have long expected USTs to follow a JGBs 1990s trajectory, a view hitherto shared only by nutcases like Gary Shilling and Albert Edwards, and my Leftyness. Look for this view to catch on. We will give this a fleshing out later on.

"The second the market starts to rally to cover some of that lost ground, they'll be at it again..."

There will be more ECB rescue nonsense and we will hit that SPX 1182-1192 zone of resistance. That's when we expect the big short equity positions to get put on. It's too late to prevent the Euro going to parity.

The market action is pretty impressive. However given how long this thing played out I would not be surprised to see a bounce back in the low 1100's or very high 1000's on the S&P. It would be the scenario that frustrates the most market participants. Although market action with little retracement would certainly catch everyone off guard as well.

GS continues to tread water. Probably something to keep an eye on. The financials are probably holding on due to the prospects of an infusion of more government aka taxpayer money. The day one of the PIIGS default or the Greece bailout gets rejected, financials will be crushed IMO. As we all know and has been said here before, these bailouts are not about countries or its citizens, this is about BIG BANKS.

I mean... on one side, reducing auction sizes would likely reduce the possibility of them FAILING (which would not be good)...

OTOH - With Europe not being able to fund ANYTHING at the moment, you'd think that the UST would want to take the whole kit and kaboodle to the window as soon as possible if there is an appetite for, er, um, "safety"...

BUCKY hit 84.30... remarkable... charting BUCKY will be huge from here. Congrats to all those who have paid attention to FX of late !!

CV, reducing auction sizes means that they are reducing supply and playing safe, having survived the weak auctions earlier in the year. With trouble all over the place, demand for Ts is set to be strong and may even go through the roof.

BTW, we are selling some 5y Ts today to raise cash and would re-enter at the long end where the risk/reward ratio remains more favorable.

With Bucky strong and weakness elsewhere we might even see strength in US bond and equity markets together for a while.

It is early Monday morning after a weekend of partying (like Tiger Woods hardcore with a litle ambien thrown in for good measure) and the alarm has been going off for a good hour but you've been hitting sleep every five minutes. Unfortunately you can't put off getting up any longer as you have that meeting at 9am. You get up and face the music of the hangover, wobbly knees, and dry heaves. It is not a pretty sight but we all have to face the music (or in Tiger's case Elin with a club). It ain't pretty and the fallout is massive (ask Tiger).

"Anyone got input on what we are seeing? ADP? Weaker than expected? Or are we watching weakness in the Euro translate into forced carry unwind as we have all predicted?"

This from RP, seems fitting as ever on a day like today:

"It is not precisely correct to say that news and other extramarket events and conditions are irrelevant. For one thing, they can provide a basis for the rationalization of market opinion formed simply by one's emotional state, the pervasiveness of which is precisely why markets are patterned. It is rationalization that allows people to avoid exercising reason and therefore to act on the basis of their emotional states. So the pervasiveness of people's pretending to follow news is why markets are patterned and why following news cannot work."

The way CV sees it, all those "shovel ready" projects that Obama/Biden kept referring to were just their Administration (and their media pals) "shovelling s***' to Americans in the form of propaganda...

Are you sure you're not talking about cognos/Harry Wanger's "tradestation"?... :-)

I bet COGNOOSE and HW are sweating buckets today, all is calm at LB's desk today as those much derided fixed income positions [assembled during the DEATH OF TREASURIES era in late 2009] are looking extremely good.

should be able to identify targets for this bounce if this mornings lows completed 5 down, some simple math to figure out when we can eliminate it being a wave 2 retrace rather than a move up now to new highs to complete the March 2009 rally.

Exactly, lb. Many of my family and friends are now paying attention to the stuff that I was exorcised about 6 months - 1 year+ ago because it's now finally coming out in the MSM. Only now they now are starting to understand why I was so apoplectic back then. I just nod my head at them now.

someone a few weeks back was postulating that cognos and Harry Wanger were the same person and was a "mastermind of deception" who spent his days trying to "outwit" other posters with his incredible skills in subterfuge-

I was just checking the div payout in JNK.. (as I was wondering who in their right mind would have bot that junk up to $40).. May's div was .31.. ten cents lower than last August's. It was been dropping steadily 41, 39, 38, 36, 35, 33, 31

"By the time peeps read the financial NEWS tomorrow, it's the OLDS..."

LB, what I'm getting at is I think the following applies:

1. How do you identify what news to follow. The answer is you can't, but the media tries to explain everything and when they can't explain it, as we've seen before, they call it "technical". Today is providing all kinds of outlets to claim causality.

2. We've all seen the market bounce or dive on the release of "news" and then sometimes it doesn't react at all. It need not do so because after all, what created the money supply figure, or the CPI figure, the home sales numbers, or the ADP number in the first place but people acting in concert *before* the number was announced?

Collective actions are the fabric of our experience well before the number comes out, and the motivations that produced it come even before that. The release of figures like these never change the markets larger trend. On all time horizon longer than two minutes, news lags the market.

the market doesn't see into the future, as the discounting concept suggests or what we call "priced in"; it just records the causes of the future. Increasingly optimistic people expand business; increasingly depressed people contract their business. The results show up later as a "discounted" future.

Doesn't it sound dumb, to say out loud, for example, that investors started to panic in 1929 because they suddenly realized that the worst depression in history was coming and that ten years afterward, Germany and Japan would be bombing everyone?

If those 3 deaths in Greece were caused by the people and not the police then they just ushered in austerity for themselves. Nothing wrong with protest but when you go to far you've weakened your stance.

It would be a very bullish turn of events, triggering a potential reversal of short-term down trend, if buyers can push prices back above the 1,170 level, or to be safe, above the resistance level from yesterday’s close at 1,175. That would likely trigger a ’short-covering’ rally higher.

However, 1,170 is the key price level to watch, as it still remains the 50-day EMA and is a ’round number’ level.

Watch to see if sellers step up here and trigger a ‘bear flag’ sell signal, which would be triggered if we break back under 1,165. Remember that 1,150 is the key level to watch as a major reference point, and would be the logical target if we break back under 1,160.

Keep a close watch on market internals and price as it interacts with these reference levels – 1,170 as a line, 1,175 as a bullish breakout level and 1,165 as a bearish line and 1,160 as a bearish breakout level.

You know... If you rub two sticks together there you might have a trade...

Look at it this way...

Both SPX & C, right now are trading at the levels that we saw on March 31st (EOQ)...

Most all of the "biggies" have reported earnings, and the next bit of juice we might see will be in the RUN UP through end of Q2 - and on through the beginning of next EARNINGS SEASON in July (where the banks report again)...

So while this EURO stuff plays out, govvies catch a bid for awhile... Then you get your classic "dumpster dive" into EOQ and through bank earnings...

They should be able to keep "stock" prices somewhere around the level they're at now (after a dip & recovery)...

They can use REPOS to do the "dumpster diving"...

SELL THE NEWS in July...

For now, I'd be looking for further weakness in C... But hell, if it gets real bad, it might be worth taking a "punt" on into EOQ...

Really can’t say if this is a one day event or will be something more but LPS, who is a outsourcer of REOs for many banks just dropped 609 REOs in California today, all from Bank of America. Guess that means BAC has been sitting on foreclosed properties and who knows how many they have in their little piggy bank. About 40 of the 609 are in San Diego County today. Normal California daily assets for LPS is around 20-30 as a point of reference with 2 to 3 in San Diego County.

CV, did you know, "... quinoa is actually the seed of a plant that, as its scientific name Chenopodium quinoa reflects, is related to beets, chard and spinach." Also, "Not only is quinoa high in protein, but the protein it supplies is complete protein, meaning that it includes all nine essential amino acids. "

I'm shoveling it in my kisser as fast as I can.. mmm, along with some pesto covered mahi i made last night.. my arugula/spinach/shallot saute is, alas, not leftover..

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